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Michigan Builders License Exam Study Guide
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What is the first offense penalty for engaging in the practice of residential building without a license? ✔✔Not less than $5,000 and not more than $25,000 and/or one year in prison. Subsequent violations can extend the prison time to up to 2 years. What is the penalty for engaging in the practice of residential builders license, resulting in a death? ✔✔Not less than $5,000 and not more than $25,000 and/or four years in prison On your individual builder's license application, what should you write as your "business address"? ✔✔Your personal address What is the cost for the individual builder's license? ✔✔$ After receiving your residential builder's license, what are the only trades not covered by your license? ✔✔Plumbing, electrical, and HVAC Who is the TESTING company for the State of Michigan? ✔✔PSI What is the name of the department that regulates your license? ✔✔LARA What are the 2 parts of the Residential Builder Examination? ✔✔Business and Law examination/Practice and Trade examination
What is a good quick asset ratio? ✔✔1 to 1 Under the Carpentry section of the test, what does a "span table" tell us? ✔✔What species and what grade of lumber a floor joist has to be to span a certain distance Which is NOT a reason that you need a residential business license? It allows you to be able to file a lein on property It allows you to pull a residential permit It allows you to file a lawsuit if necessary It allows you to work on commercial properties ✔✔It allows you to work on commercial properties Where does most fraud occur? ✔✔In the residential market As a builder, your license falls under the regulation of: ✔✔Both rules by the director and board as well as laws of the state of Michigan What is the make up of the 9 members of the board? ✔✔4 residential builders, 2 M + A contractors, and 3 members of the general public Under the definition of occupational code, what does the word "limitation" refer to? ✔✔A condition, stricture, restraint or probation attached to a license relative to the scope of practice Who, upon completion of a hearing, shall assess a penalty or penalties? ✔✔The Board
- An owner of property with reference to a structure on the property for the owner's own use and occupancy Beginning the license cycle after December 21, 2007, the department shall issue the license of a residential builder and residential maintenance and alteration contractor for a period of how many years in duration? ✔✔3 years After receiving your initial residential builder's license, how many hours of continuing competency are required within the next 3 years? ✔✔21 hours If a salesperson desires to change employment from one residential builder or maintenance and alteration contractor to another: ✔✔The license shall be forwarded to the department, an application will be made for a transfer, and a new license under the salesperson's new employer will be issued Regarding workmanship, how long does a client have to file a "verified complaint"? ✔✔18 months from the completion of work If a licensed residential builder or licensed residential maintenance and alteration contractor wishes to change the control or direction of the business, how long do they have to report that change to the department? ✔✔10 days The department shall conduct a review upon notice that a licensee has violated the asbestos abatement contractors licensing act. What are the possible consequences for for this violation? ✔✔The department may suspend or revoke that person's license and fines may be issued
When the board issues the findings of a verified complaint: ✔✔- The department shall post on its website any final order of the board and the date it was issued
- The posting shall occur within 30 days after the final order is issued
- The department shall annually post on its website the number of final orders to the board According to the Administrative Rules, an application for a license shall include: ✔✔- The residence address of all individuals, partners, officers and/or members, as requested by the department
- The address of the principal place of business in Michigan Upon final order of license suspension or revocation, the licensee shall surrender the license to the department within how many days of the date of suspension or revocation? ✔✔10 days According to Administrative rules, a licensee shall include the following in all advertising: ✔✔- The name on the license
- The license number
- The actual business address as shown on the license According to purchase and sale agreements, the builder or contractor shall make certain that the written agreements clearly state the terms of the transaction, including: ✔✔- Specifications and cost
- The type and quality of materials
- The type and amount of work to be done The department, after investigation, may request a licensee to appear at such _________ as is necessary to determine whether there is cause for complaint which would require a hearing on, or dismissal of, the complaint. ✔✔Investigative conference
According to the Construction Lien Act, what recommendations are given for your protection? ✔✔- Never use your assets to complete someone's project
- Get sufficient down payments and/or obtain sufficient progress payments as the job progresses
- Have well defined contracts which include rights and responsibilities of binding parties Which document lists each subcontractor, supplier and laborer, for whom payment of wages or fringe benefits and withholdings is due but unpaid, with whom the (contractor)(subcontractor) has (contracted)(subcontracted) for performance under the contract with the owner or lessee, and the amounts due to the persons as of the date of the statement? ✔✔The sworn statement A claim of lien MUST be completed within how many days of last being on the job site? ✔✔90 days If after filing a claim of lien, you DO get paid before the lawsuit, what form must you complete? ✔✔Discharge of construction lien What is the maximum amount you can collect through a judgment in the small claims division of the district court using the small claims form DC84? ✔✔$6, After Mr. Jones receives a sworn statement that he owes ABC framing $40,000, how does Mr. Jones know that ABC framing was ever on the jobsite? ✔✔The proof of service of notice of furnishing According to the State Construction Code Act, how often will the state code be updated by the Construction Code Commission? ✔✔Every 3 years
The Uniform Commercial Code states that a contract for the sale of goods for the price of $1,000.00 or more must be: ✔✔In writing sufficient to indicate a sale between parties and signed According to the Americans With Disabilities Act (ADA), which of the following is NOT true? The law applies to employers with 15 or more employees Employees are allowed to require a medical exam before making a job offer The first violation results in a $55,000 fine ADA requirements are enforceable only through the U.S. Department of Justice ✔✔Employees are allowed to require a medical exam before making a job offer Minimum Wage Law states: ✔✔- After 40 hours in any one work week, compensation is 1 1/2 times the regular rate
- An employer shall not discriminate based on sex when paying employees for the same work requirement Who is covered by the Employing Minors Youth Employment Standards Act? ✔✔Ages 14, 15, 16, and 17 The Family Medical Leave Act states: ✔✔- Employees may receive unpaid leave for certain reasons
- Employees may receive up to 12 weeks of leave in a 12 month period
- This law pertains to employers with 50 or more employees engaged in commerce or affecting commerce Which of the following is true in regard to employing minors? ✔✔- A minor shall not work more than 6 days a week
- The investigative unit In reference of the lien law, what is the FIRST document that has to be filled out to continue the lien process? ✔✔The notice of commencement Homes built prior to what year require at least 1 smoke detector? ✔✔ 1974 What STATE law regulates discrimination on the jobsite? ✔✔The Elliott-Larsen Civil Rights Act A contract is not required if the job is under: ✔✔$1, Within how many days of being on the jobsite must the I9 form be completed? ✔✔3 days What act requires prevailing wages to be paid out? ✔✔The Davis-Bacon Act What is the most common type of contract used in residential construction? ✔✔Lump sum contract What should you be sure to include in your contracts? ✔✔- Change orders
- Weather/ground conditions
- Buried debris What is true in regard to a cost plus/fee contract (Construction Management)? ✔✔- The total construction costs are unknown to the owner
- The contractor provides a target estimate
- You must have written agreement concerning payment of contractor fees What type of contract is used when the scope of work is poorly defined and/or to cover emergency repairs and renovations to occupied facilities? ✔✔Cost plus percentage of cost contract (Time and Materials) What type of contract requires the owner/architect to compile a list of total quantities as well as the contractor to provide the cost per unit to supply and install? ✔✔Unit price contract When having a contract signed, what should you be sure to verify first online or at the assessors office? ✔✔Legal ownership When asking a customer for a certain percent of money after a section(s) of a job is completed, it is called: ✔✔Progress payments What is it called when, at the end of a job, you walk through with a customer and check off any needed repairs or discuss work to be redone? ✔✔A final punch list What are 2 items suggested to avoid in your contracts? ✔✔Start and completion dates Kitchen cabinet layouts from the kitchen designer are an example of what? ✔✔Shop drawings Change in conditions should be the responsibility of: ✔✔The owner
- Various levels of progress/times As a general contractor, what must you always have onsite? ✔✔A competent employee with a first aid card Who is responsible for temporary power? ✔✔Whoever is stated in the contract According to the sample contract on page 27, when is full payment of a change order due? ✔✔Upon agreement and signing of the change order What should a quality contract contain? ✔✔- Name and location of the project
- Drawings and specifications identified as "Project Number"
- Insurance requirements for owner and contractor In order to protect yourself from potentially costly changes, what should you include in any contract to build a new house? ✔✔"Per project number, last revised on" then list specific page numbers and revision dates What is a verbal direction from an architect or designer to change something called? ✔✔A modification Ownership of drawings must be: ✔✔Defined Who is responsible for corrections to completed work according to the subcontract? ✔✔The subcontractor responsible for the correction
(whoever installed it protects it) When can the builder substitute materials? ✔✔Only with the permission of the owner The cost of moving equipment on and off the jobsite is called: ✔✔Mobilization costs Whatever contract you decide to use should be reviewed by: ✔✔An attorney Who is responsible for collecting and maintaining safety data sheets on the jobsite? ✔✔The general contractor Any code related penalties that are caused for the general contractor are the responsibility of: ✔✔The subcontractor Which of the following is NOT a responsibility of the subcontractor? provide progress reports provide material safety data information as requested provides for toolbox safety talks provides for the protection and safety of persons and property ✔✔Provides for toolbox safety talks What are the three methods for alternative dispute resolution? ✔✔Mediation, arbitration, facilitation
- Lead stays in soft organs for 6 to 8 months What current techniques are there to identify lead paint? ✔✔- X-ray fluorescence
- Laboratory analysis
- 3rd party inspections (risk assessment) What are the controls for lead based paint? ✔✔- Removal of LBP through safe work practices
- Enclosure/encapsulation Contractors are not required to be "certified renovators" if they do the following: ✔✔- Demolition of unoccupied structures
- MIOSHA Part 603 Rules are still applicable Lead dust breathed in by adults can create disorders, including: ✔✔Kidney and brain damage What is a colorless, odorless, radioactive gas that is caused naturally in the soil but can seep out? ✔✔Radon The EPA has set a "Take Action Level" for radon at: ✔✔4 PCI/L Radon is the second leading cause of ________. There are 21,000 related deaths in the U.S. each year. ✔✔Lung cancer
Up until the ______, asbestos was commonly used in many building materials ✔✔1980s To protect yourself from asbestos during renovations or demolition, what is the most important thing you can do? ✔✔Have the house surveyed by a qualified asbestos professional Asbestos containing material (ACM) means any material containing more than _____ asbestos ✔✔1% One who is capable of identifying existing asbestos hazards in the workplace and selecting the appropriate control strategy for asbestos exposure, who has the authority to take prompt corrective measures to eliminate them is called: ✔✔The competent person Common products that might have contained asbestos in the past, and conditions which may release fibers, include: ✔✔- Steam pipes, boilers and furnace ducts
- Resilient floor tiles
- Soundproofing or decorative material sprayed on walls and ceilings What type of common household products could possibly contain asbestos? ✔✔- Hairdryers
- Stove top pads
- Fireproof gloves Houses built between what years may have asbestos as insulation? ✔✔1930 and 1950
What should you be sure a subcontractor has before hiring them? ✔✔- A workers' compensation policy OR
- A workers' compensation exclusion form Before hiring a subcontractor that has a workers' compensation exclusion form, what additional form should you have them fill out to reduce your liability? ✔✔A Subcontractor Release and Waiver of Liability Form Workers' Compensation related to a death shall include _____% of the after tax weekly wage of the employee to be paid to dependents who were wholly dependent upon the employee's earnings. Such payment shall continue for _____ weeks from date of death. ✔✔80% / 500 weeks Which type of insurance protects the construction project and materials form external forces and has endorsements that can be added to include protection against fire, wind, storms, vandalism and "acts of God." ✔✔All risk builders insurance What type of insurance provides added risk protection to an employer who has an employee injured or killed in a related construction accident? This is over and above the worker's compensation insurance. ✔✔Employer's liability insurance Who has the obligation to ask for and receive copies of all required insurance policies from the subcontractors insurance provider? ✔✔The general contractor What are key ideas to developing a marketing plan essential for a company's growth? ✔✔- determine your personal strengths and weaknesses and those of your business
- provide a method of establishing trust in the company for both clients and employees
- provide a portion of resources to promote your plan How can you promote the name of your company with the public? ✔✔- jobsite signs
- vehicle signage
- brochures and mailers What type of bond guarantees that the contractor will complete the contracted project for the estimate sum? This bond is usually for 100% of the contract sum. Should the contractor default then the bonding company will provide for completion of the project. ✔✔Performance bond How do you establish trust with a client? ✔✔By doing what you say you will do How do you establish trust with your employees? ✔✔- ask for input
- pay them on time
- value their feedback What are the resources you have to promote your business? ✔✔Time and money How do you take time to promote your business? ✔✔- attend community events
- give out items with the company name
- join associations In what ways can you monitor previous clients? ✔✔- call backs
